“There’s so much insider trading around these retrospectives”, says London-based dealer Kenny Schachter. “Galleries call their top two or three collectors as soon as they find out and let them in on the deal. In commodities trading, where I used to work, that’s called ‘front-running’ and it’s illegal. I remember when I first stumbled into the art world, I was shocked that it could be run in such an archaic manner.” By the time the retrospective is officially announced, little primary-market work is available, so the second-tier collectors end up either buying the artist at auction or paying the newly raised prices justified by the retrospective. “The issue of how people use and spread this kind of information has not really been looked at in depth, but it actually deserves some attention”, says Susan May, formerly a Tate curator and now Head of the Arts Council Collection.

“We always have to know where the line gets too close for comfort, because the last thing we want is to be scrutinised for insider trading. But the art world is such an intensely sociable environment, and it’s not as though we ever make people sign confidentiality agreements.”

Is that really “insider trading”? “The art market is unregulated, so there’s no rule defining what ‘insider trading’ means”, argues major Manhattan collector Adam Lindemann. “Also, it’s good to know about these shows ahead of time and people definitely buy based on that ‘privileged information’. But it’s no guarantee—unless it’s a hit, the artist’s market can often go flat afterwards.” Still, it hardly seems a level playing field when those collectors closest to a museum can profit from advance knowledge of where it will place its imprimatur. Yet museums rarely proscribe such activities. Quite the reverse, in fact. “Generally curators are encouraging people on the board to buy pieces by artists that a museum is planning to show or acquire, hoping that the work will be donated later on”, says one museum-world insider. “It’s seen as mutually beneficial. Information about a big solo show never stays secret. But it stays secret just long enough.”

Among dealers, there’s widespread disagreement about what should happen next. “There’s a lot more money in this business than there used to be, and yet we’re less regulated than used car dealers”, says one major American dealer who is taking part in ArtBasel in June. “And if we don’t start cleaning up the business, we might end being forced to do it from outside. Frankly, I’m surprised [New York State Attorney General] Eliot Spitzer stopped after those tax evasion cases—maybe he didn’t realise how much money is involved here.” But another top American dealer, likewise coming to Basel, says, “If you make the business transparent it would collapse overnight. I have to have the option to lie to collectors about what’s available or quote them prices 10 times what other people paid. Entire careers are built upon fabrications, like about which shows sold out and at what prices”.

Yet it’s precisely such uncertainties that can threaten the growth of the art market, points out Ian Charles Stewart, a London venture capitalist and art collector who also sits on boards at both the ICA and the Arts University London. “For anything to truly be called ‘investment grade’, you need to be able to track its prices over times, both at auction and in private sales”, he says. “A registry of all sales, auditable by the buyers and sellers, to show the price history of a piece would help a lot. The passage of art-market information now is so inconsistent that it’s like tech stocks from 1994 to 1999—the market is flush with cash, but it’s the insiders making the most money and the newbies often tend to learn hard lessons.”